What is first legal requirement for formation of a company? This is willingness to form a company. Who should have this willingness? The promoter! Who will be the promoter? Any person, natural or legal! However, in case of One Person Company only a natural person can incorporate a company. Even in case a legal person, a natural person shall digitally and manually sign the incorporation forms and documents.
This is needless to say even a form for reservation of a name for proposed company need a digital signature among other requirements.
Digital Signature and Digital Signature Certification is defined under the Information Technology Act, 2000. “Digital Signature” means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3 of Information Technology Act, 2000. The authentication of the electronic record shall be effected by the use of asymmetric crypto system and hash function which envelop and transform the initial electronic record into another electronic record.
Digital Signature is not a scan copy of your manual signature but an encryption program which put information of persons signing a document and date and time. Once s digital signature is on a document, the document may not be amended unless these digital signatures have been removed or every such change is recorded and saved under another signature.
Presently, there are three types of digital signatures. For the purpose of signature and authentication of forms and documents under the Ministry of Corporate Affairs digital signature class II are required. Further, these digital signatures are required to be connected with Permanent Account Number (PAN) issued by Income Tax Department in case of an Indian citizen.
Presently, digital signature certifies are issued by “Certifying Authority” on the basis of PAN (or Passport in case of foreigners) and Address proof. Further, PAN Cards are being issued on the basis of Address proof and Identity Proof.
For Digital Signature following documents are considered as Address Proof: Electricity Bill, Telephone Bill, Voter Identity Card, Bank Statement, Passport or Life insurance policy copy. Interestingly, none of them is a basic address proof and we required further address proof and identify proof to have any of these documents. Even, much talked about UID or Aadhar Card also have a requirement of address as well as identify proof.
Now, we have requirement of PAN or Passport for identify proof for the purpose of digital signature certificate. In case, an intended promoter does not have proper identity proof, he should get this document as a first step of company formation.
This is clear one need to apply a PAN Card and a Digital Signature, unless already have, while thinking about formation of a company. Any inefficiency may cause a delay of about 20 – 60 days even before concrete thinking about a company formation.
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